Seven Keys To Improving Distribution Productivity

Distribution operations in most companies are facing enormous pressure. With a sluggish economy and brutal price competition, most logistics organizations are being asked to achieve year-over-year cost reductions on an annual basis. At the same time, customer service requirements continue to accelerate, with shorter cycle times and more challenging value-added service requirements. The emerging RFID compliance mandates by major retailers and others will only add to this pressure, requiring that many companies perform additional steps to apply RFID tags to pallets and cases as part of order fulfillment processes.

The last few years have also seen very constrained budgets for major investments in new distribution facilities and material handling equipment. As unit volumes increase, putting further strains on DC capacities, many companies must find solutions that enable them to achieve greater throughput from existing facilities without major investments in automation.

So, while distribution operations are becoming more challenging and complex, corporate executives expect the logistics organization to make additional contributions to the bottom line by continually eliminating costs, yet often limiting capital for operational improvements.

In the face of these challenges, distribution executives are aggressively looking for alternatives that can help them drive out costs and increase throughput, while maintaining or enhancing customer service.

Labor Productivity Improvement Provides the Answer
Effective Productivity Improvement is an excellent response to these challenges and ideally involves the intelligent application of three components:

• Engineering to determine the optimal operating methods and procedures and to develop appropriate performance standards
• Labor reporting software, which enables improved workforce planning and drives improved productivity through individual measurement of employees against fair, accurate standards, as well as other capabilities, such as workforce planning and tracking logistics quality and costs.
• Execution management, to ensure that the potential gains from productivity improvement initiatives are realized during and after implementation. This is achieved through appropriate training of supervisors and operators, and management of the cultural, operational, and supervisory changes required for a successful productivity program.

The Seven Keys to Productivity Improvement
1. Start With Individual Accountability
2. Build Standards Based on the Right Methods and Procedures
3. Productivity Can Be Improved Through Software or Engineering, but Results are Maximized When Both Are Used in Combination
4. Focus Management's Attention on the Details
5. Train Operators and Supervisors for Success
6. Incentives Can Work – But Only if Done Well
7. Utilize Formal Change Management Teams and Techniques

For the complete white paper, please visit Tom Zosel Associates' website at www.tzaconsulting.com.